The timing of Genesis Integration’s acquisition of Audability is, well, timely. The acquisition brings the Edmonton, Alberta-based firm to 10 locations and allows it essentially to physically serve all of Canada.
Less than two weeks ago, AVI-SPL staked a similar claim after it acquired Calgary, Alberta-based Sharp’s Audio Visual, strengthening its Canadian integration firm presence. At the time, Jeff Faber, president and CEO of Sharp’s Audio Visual, said, “there are some national players who’ve got locations in some parts of the country but nobody is truly national.”
In January, Genesis’ McCarthy told CI that Genesis’ goal is to become a $50 million firm by the end of 2018. This acquisition evidently crushes that goal.
Genesis Integration is now truly national, according to president Kelly McCarthy. “We have 10 locations. If you add in our broadcast and production group which would be our 11th location, we can do business coast to coast.”
Meanwhile, Genesis Integration isn’t shy about pointing out a difference between Tampa, Fla.-based AVI-SPL’s reach across Canada and that of its own – at least that’s how I read this quote from Audability CEO Andrew Turner in the joint press release:
“Being Canadian-owned and operated, we have a unique understanding of this country and the needs of our customers.”
Acquisition Is About More than Geography
While the battle for Canadian integration firm dominance is a good subplot, McCarthy points out several other reasons why the acquisition of Audability by Genesis Integration is “opportunistic.”
In the press release, the Genesis Integration president talked about “synergy,” much like every other press release about every other acquisition proclaims synergy. Speaking with Commercial Integrator, he expanded on what he sees as an “opportunistic” move to leverage actual synergy.
Genesis Integration, he points out, is a traditional AV integration firm. CI wrote about McCarthy’s self-professed struggled to embrace a more service-oriented business model. Audability is anything but traditional.
“I’m a gear head,” says McCarthy, Genesis Integration founder. “I love the equipment, construction and building solutions for customer. Genesis has always come at business from AV side. Audability is different.”
Mississauga, Ontario-based Audability is a collaboration and business solutions provider, McCarthy says. “AV was just a means to an end because they were doing more of an RMR business with collaboration and IT and they were getting pulled into the AV space.”
In their talks, the two discovered that “we almost fit together like a zipper,” McCarthy says. “I’d say we’re missing this piece and Andrew would say we’re really strong in that. Then Andrew would say we’re missing this piece and I would say that we’re strong in that. We found that one plus one equals three.”
These are the reasons the acquisition was opportunistic, McCarthy says, adding that it would haven’t have made sense simply for geographic and revenue reasons.
The reality, however, is that those reasons are significant. Adding Audability’s four locations including two in Quebec, as mentioned, firmly establishes Genesis as a national Canadian integration firm.
On the revenue side, McCarthy estimates the new firm’s combined revenue to be about $65 million at the end of 2017 and is forecasting $75 million for 2018.
Consider that after Genesis Integration acquired London, Ontario-based Edcom Multimedia Products in January, McCarthy told CI that Genesis’ goal is to become a $50 million firm by the end of 2018. This acquisition evidently crushes that goal.
Meanwhile, Edcom and Audability may mark just the beginning of Genesis’ growth spurt. Asked if we’ll be talking about another acquisition soon, “We’re not done,” McCarthy says.